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tv   FOX Business After the Bell  FOX Business  February 19, 2013 4:00pm-5:00pm EST

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david: welcome back. i am david asman, who has appeared magically through television next to liz claman. lauren simonetti's, we are very close to the end of the trade. we have this news perhaps medicaid and medicare weren't going to pay as much as they were hoping for and a whole bunch of stocks are down big-time. lauren: this health care sector over the past year, david, up 20%. liz: office supplies leaving the gate. we knew they would move because of the rumor yesterday and report that officemax and office depot might be linking up, but these are big moves today. lauren: huge move moves come ash as 30 plus percent during the session. did you know there were $158 billion in deals so far this year and only mid-february? david: and we will have a lot more to come.
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best buy doing quite well, why? lauren: best buy has started a turnaround effort, best buy shares are certainly higher. while that was expected, investors liking that move as well. liz: videogame makers to the upside. lauren: that is one investor optimism that playstation four could be announced tomorrow. it will be a big one. david: thank you very much. we will come back to you as we get breaking news, lot of it coming. dell reported, herbalife, lot of reporting as we see an up day in the market, very nice sign looking toward earnings in this hour. keep it right here, we will report the news as soon as we get them with expert analysis. the biggest game today, the
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russell 2000, up almost a full percentage point, but good games on all the indexes. liz: google hitting a new all-time high, rising up above $800 per share by a long shot for the first time ever, the shares are up more than 16% this year. only three other stocks trade above $800. david: while stocks are up, gold down, another bad day. not as bad as some of the days, but gold down significantly, four straight days of losses. closing about 1600, but this is the lowest level since mid august. more than $45 per ounce. liz: number of household product names hitting new all-time highs.
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wd-40 seeing lifetime highs. how about clorox seeing an all-time high for the second time in four days. and kimberly-clark, maker of kleenex and huggies making an all-time high. do i sound like a broken record? we have that one. david: we're waiting on earnings from herbalife, and dell and all of which great interest in. we will bring you the numbers as soon as they are released. and president obama says we have to grow the economy, create good jobs and everybody will find out why raising the minimum wage might have just the opposite effect. liz: just a few hour g hours age was hit by a cyber attack. earlier today an alarming report was released claiming china's military, the government military has been hacking into a
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lot of american companies and organizations, 140 plus. is there a hacking war being waged? the chairman of the company that spotted it and found it. a company that put out the report, the ceo of the company to help defend against these tests come back attacks. david: the possible move to take it private is dell. how do they do? ashley: on earnings per share, $0.40, the aspect was 39. on the revenue, 13.3 billion. a beat on the revenue as well. there are some other numbers as we delve into this, consumer revenue for the quarter was down 24%. they will not be giving a quarterly outlook because of the efforts to take the company private, but certainly a beat on the earnings and revenues.
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david: let's go to mark sebastian. dell is doing pretty good after hours. a little bump. i guess the key was every way it went, we will see a cell of this company. if it was too high, to go private, that was too low, to go private, right? >> michael dell was probably hoping for a little bit of a mess here because it gives, would help him get the 13.65 price up. this report leaves a little bit more credence to the price should be a little bit higher. 14 something make sense, that is probably why dell continues to trade at a premium to the deal price. liz: they're not getting outlook because of the pending deal. the fact is they have large enterprise business with revenue 4.7 billion in the quarter, 7% decrease. the stock is not budge.
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it is slightly above where it closed, this is not good news for michael dell are civil or liksilverlake,they wanted to go. >> i think they're going to have to pay up. if you look at the longer-term calls, there's a little bit of value. i think all of the smart players are betting it goes up. maybe not a lot, but marginally. to be honest, that happens a lot. especially when a stock is being bought on its absolute low. when i see the takeout price at this level if michael dell was not involved. they would be complaining about the price and the bottom fishing of the buyer. just so happens the buyer is michael dell. david: dell has stuff besides pc. but there is the demise of pc,
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everybody going mobile. but perhaps it is premature, there is still some life in the pc market, that is what this seems to show, right? >> i agree. if you look at the laptop business, you can find some nice high-performance laptops for cheaper than an expensive tablets. we have to wonder, at some point consumers are going to figure out what they are getting for what amount of dollar and i think you will see some of that slip back into the pc space. plus you are seeing apple, everybody claw at him, that will be a real problem for apple and bracing for a lot of the pc makers. in truth, microsoft. liz: ashley, don't know if you can see from where you are, what their pc business did, it has been under pressure, i am not seeing it on the wire. >> there was consumer revenue off by 24%, but other than that
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there hasn't been a whole lot come down. liz: storage revenue. david: we will be going back to mark sebastian, both of which are due to report within this hour. we have investment management chief investment officer, and premier wealth first allied secured senior wealth strategists. good to see you both. first to you, the news from dell, that's specific to dell or something larger about the high-tech specifically the pc industry? >> it is specific about the pc industry but let's not forget dell is in a unique position as the company begins to obviously foster what needs to happen to take them private. i do think we need to keep our eye on industry sector as a whole because let's not forget
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also dell is the market leader in that segment. liz: we're looking at your outlook, you are overweight certain areas because you obviously feel there is still an opportunity and a way to make honey. what is your picture right now? >> we're bullish across most asset classes especially equities. u.s. stocks a small allocation, a lot of opportunity in the foreign market, especially the can down europe and also markets like russia, greece and even argentina. david: you wrote a book called the iv ip portfolio, one of this mimics what harvard and dl are doing. we're also big and high yield bonds. 20% of your portfolio in high yield bonds. give us examples, don't have too many specifics about where to go. >> with there are a lot of things that investors could emulate or should, the high equity focus, big exposure to
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real assets, briefly commodities as well as real estate. the other is high yield bonds. they have equity like characteristics, so don't want to necessarily put them in their own category and a lot of the low hanging fruit on high yield bonds has been taken. they had an amazing run the last few years, we still have exposure to both high yield in the u.s. as well as foreign. liz: tell us where you see the money, i know you are a believer in the housing recovery, let's talk about that. >> still believe in the housing sector and homebuilders. even though the out some industries, i like financials, i like homebuilders, i like energy, i like the metals including gold and silver. a great time to buy them right
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now. i like mega caps. i think optimism rules as far as equities go, but take a look at your fixed income portfolio and each investor's portfolio and take a risk-based approach and diversify amongst that asset class as well. david: would you go for a specific emerging market or would you go for the collection of different funds? >> i would do both. look at russia for energy, brazil, india, look across-the-board at emerging market first and foremost in the frontier market as well, some of those who don't only talk about. liz: thank you very much for your ideas. cyber attacks come in making this doesn't affect you. it does. they have been making massive
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headlines. from a building in china that may be government. the company a new report says the chinese military is behind many of these attacks is with us. david: and a money manager over $70 billion under management says it needs alternative investments in your portfolio including a few commodities. find out what they are next here on fox business. [ indistinct shouting ]
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let's go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities. siemens. answers. liz: so dell beats on the top and bottom line but down 31% year-over-year when it comes to revenue. dr. lauren simonetti. lauren: dell beat on profit and revenue coming in stronger than expected. a lot of areas of concern. the revenue down 24% and it
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didn't stop there. the desktop will be down 20%. global pc sales in 2012 certainly down from 5%, so this is the trend we are seeing. stocks relatively flat and the regular session and after hours. the stock is up more than 50%, so that is something we can take into consideration. david: michael dell i in the conference call will be speaking. this will be first time he has made any public remarks since the term of the sale has been made. liz: the prices which they want are below with the stock is trading. david: s&p futures are closing, let's go down to the pits of the cme to see how the market is shaping up. >> it looks like we have closed
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unchanged. keep an eye out for herbalife. i think that will end up being a little cheap, there are just too many people watching the stock for a little $4 billion company. everybody is looking at this thing. marriott $2. interesting trade, customer bought 115,000 calls on the january 2015 strike. liz: interesting, thank you for pointing that out. david: investors desperately looking for returns may want to look outside the standard stocks and bonds for something a little different. what type of alternative investment would be the biggest bang for your buck? over 20 years of experience alternative investments enter now to share a few ideas.
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head of alternative investments joining me now. good to see you, thank you for coming in. with a minimal amount of investment jargon, tell us what you mean to alternative investments. >> are looking at it, anything outside of stock bonds and cash. asset classes that can perform differently than stocks and bonds especially when you need it the most, or if we see a higher interest rate. david: if you get the stock market is tapped out, i-india think we will not ge give any kd of good yield on bonds, this is the funds to go to. >> yes. they have tended to perform well during difficult times but also during the bull market in equities. more about diversification standpoint not an either or scenario. david: while the s&p 500 did
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extremely well in the past year, not your funds not necessarily so. this is for a bear market. >> for the most part they need sustainable price trends. combined with government intervention hasn't been ideal for managed futures. david: a negative return of 7% in the past year. this is the index commodity fund, we're talking now about to manage future fund. >> yes. if you look at it, the 1980s and 90s were excellent decades for stocks and they were also good decades for managed futures as well. david: would it be fair to call this a bear market fund? >> has a low correlation for stock market and funds, but has shown upside because of the fact it creates sustainable price trends.
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david: let's talk about the commodity index. let's put it up this weekend. if you're concerned about inflation, this is the funds to get into, right? >> yes, historically has shown positive returns during inflationary evaluation. david: this is one that has been down. inflation has not taken off the last couple of years. >> when you look at it for a number of standpoint in the global growth standpoin of stanf individual commodities have shown upside. gold, silver, agricultural market, the drought that was created in the midwest. there are certain commodities that can take advantage of performance, even when the overall environment cannot be inflationary. david: your clients, what% of portfolio are they putting in? >> were looking at least 10% allocation, majority from 10 to 30% allocation.
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david: do they do these funds instead of gold? speed limit basket of commodities including gold and gold has a low correlation to a lot of other commodities so it is not an either or scenario. they can create interest rates and currencies as well as commodities. david: good to see you. thank you very much. appreciate you coming in. liz: have you heard of this? maybe not, but you are one of the 600 million people using their products. up next, the ceo to tell us how he finds success competing with the big players like cisco in what he does. and new partnerships with samsung. keep it here on fox business. it's a new day.
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>> welcome back, everybody. headlines regarding the apple and greenlight capital with regard to a lawsuit. a judge saying basically he is trying to decide whether the question is deciding on an injunction, whether greenlight would be irreparably harmed if apple goes forward. greenlight capital was asking for apple with regard to the preferred shares of buyback if
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they should be given preferred shares. a judge saying yes to decide whether greenlight would be irreparably harmed if they go forward, so we continue to follow this for just a collision regarding apple and earnings from both herbalife and area as well. we heard from dell on the top and bottom. revenues down some 31% year over year. liz: disinterest in the stock is not budge and to the point i know michael dell would like to see it lower. that is apple at the moment, which is just slightly higher. let me check dell, it is really quite slightly higher, barely, by a nickel. 13.87 is the ask. 13.65 is what they would love to see that because that is where they want to buy it. other shareholders don't like that.
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genband may not be a household name for you, but technology used by millions of you worldwide. if you do a service provider like comcast or sprint in many cases you're able to send your text messages like video chat all thanks in part to genband software and hardware. they announce a very important partnership with samsung. charles vogt is the ceo and president. congratulations, what is this relationship with samsung? >> we're taking genband voice over ip technology and putting it on a tablet. and changing the whole way you and i communicate in the office, so imagine creating the ultimate mobile office for everything you can do in the office, you can take on the go. very exciting. liz: samsung can pick and choose. what did you offer them? >> what was significant was two things.
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genband has been developing technologies, selling it to the carriers for years, sweetheart and the key technology we have been deploying that now we are putting into the mobile world. so taking our customers and their mobile technology is a perfect marriage. liz: you have married a lot of companies. helping them to grow and come together, so much so investors love you. we're talking about venture capitalist. what cannot offer you in return? >> we have raised half a billion dollars over the last 10 years, so a lot of exciting investors. liz: for those of you who don't know, that is a lot. even for twitter. >> one equity partners, jpmorgan executive shareholders, they have been very significant in
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the evvlution of the company, that helped us to buy the voiceover ip address. so we have done a very unique job over the past four or five years of taking a market that really needed to be consolidated and we rolled up those key assets and rebuild a great brand and a great portfolio and we can offer the service providers. liz: we were talking about what thwiththe name genband used to . >> in 1989 the name was founded under general bandwidth. liz: they really remember if you launch an ipo. when will that happen? >> we are sponsored by one of the largest financial institutions in the world, so right now we're focused on continuing to build a business and if you think about going back to look at the strategic acquisitions we have made over the last several years, it is great being a private company to
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do all that integration without the public eye. liz: i would be remiss if i did not ask you about going toward the chinese hacking story. what do you think of this? 141 companies have been hacked allegedly by chinese military or some building related to chinese military. how can the average individual or company owner with a couple hundred blackberries that they're worried about their own proprietary information protect themselves? are you worried about that? >> is something talked about 10-15 years. we are kind of like intel, our company said inside the service providers networks manages the routes and manages the voice calls. our carrier customers have been worried about hackers regardless of what geography they are from for years because our technology is at the core of what they are
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doing. having any kind of third-party hacking at these companie techns would give them information that obviously our government doesn't want to have. we do a lot of business in asia and china, we find it to be frankly a friendl family enviroe do business with china telecom, through the largest carriers in the world. we have a very thorough process that we go through that we have to recertify our software and technology for the at&t and verizon and sprint of the world, we have to do that. liz: charlie, it is a good day with you with your deal with samsung. genband is the company. charles vogt, the guy who runs it. thank you very much. david: genband, much better name. there is in the report that china's army has been hacking into american companies costing
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hundreds of billions of dollars of intellectual property. the chairman of the company that put out that report joining us and telling us what can be done to protect us against these cyber attacks. and coming up next, find out why president obama's push to raise the minimum wage might actually work against his own jobs agenda. that is coming up. [ lisa ] my name's lisa, and chantix helped me quit.
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it's a mercedes-benz through and through. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services. >> welcome, everybody. we have earnings for you. this is it herbalife. this is being closely watched with the much talked about feud between bill ackman who claims herbalife is pyramid scheme and carl icahn who has taken a position on the other side. as for the ep ask. -- eps earnings, the $1.5 on herbalife. the estimate was for 1.03, so we have a beat on that. revenue coming in 1.1 billion for herbalife. the estimate was for 1.05. it beat on top and bottom. we also have results from marriott, the big hotel
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chain. eps coming in at 56 cents on revenue of 3.7 billion, beating the eps by one cent. also beating the revenue estimates which were at 3.66 billion. of course we'll be watching for more information from both of these companies but we have seen herbalife moving slightly higher in after-hours trading, guys. back to you. liz: not bad, a beat and a beat. thank you very much. today, let's look at the market drivers that really drove stocks. stocks moved higher on reports of corporate deal-making. all three major indices as s&p 500 advanced to a new five-year high. nine out of send s&p sectors close in the green led by srg and consumer staples. materials was pretty much only sector to end the trading day lower. did you see gold. continuing to lose its luster. falling for the fourth straight session. the lowest close since august 1th. copper also posting a down day after its biggest fall
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in four months on talks that china will move to cool property purchases, less bidding. speaking of building homebuilder confidence fell in february for the first time in ten months on lighter than expected buyer traffic. national homebuilders association said the market index ticked down to 46 from 47 in january, david. david: earlier today president obama spoke about the huge deficit mentioning the importance of growth and jobs as a means to fix it. >> we learned in the 1990s when bill clinton was president, nothing shrinks the deficit faster than a growing economy that creates good, middle class jobs. that should be our driving focus, making america a magnet for good jobs. david: but did the president's policies actually help create jobs? our next guest claims that one of the president's positions could actually hurt job growth, particularly in the one group hit hardest by unemployment. michael saltzman is employment policy institute research director and he
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joins me now. michael, good to see you. so the president made a statement that i think we all agree on that a growing economy would not only help jobs but would also help our deficit but the president also wants this 20%, i guess a 24% increase in the minimum wage. what would that do to the jobs picture? >> well i think what it would do for the jobs picture, specifically the jobs picture for less-skilled employees like teens it would reduce the number of opportunities. it is tied directly to the fact that the type of businesses that employ them. if you're a restaurant or grocery store and you have two or 3% profit margin, the 24% increase in labor costs as you point out it just can't be absorbed. they have to raise their prices. if they can't do that they have to provide the same product with less service. that's where you see the reduction in employment opportunities for people like teens. david: luckily we have, the experiment has already been done the we've seen what happens in the past when we raise the minimum wage. in fact from 2007 until 2009, we had several increases
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from 5.15 an hour up to $7.25 and hour. that was 40% increase after the jewel 2009 increase, the 600,000 teen jobs disappeared in the following six months. that seems to be a direct correlation, no? >> yeah. there is a couple of studies looked at that, most recent minimum wage increase found job losses of varying ranges but it even goes beyond the most recent one. if you look back over the last two decades or so, 85% of best journal published research finds some sort of job loss occurs after a higher minimum wage. it is an empirical reality. the white house tried to dodge it the way they talked about this ish but the economic research doesn't lie. at a time when unemployment for teens has been above 20% for over four years, this is the kind of consensus you can't afford to ignore. david: particularly among minority teens. black youths have been hit particularly hard by the increases in minimum wage. so much so that two
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researchers said the consequences of the minimum wage for black young adults without a diploma were actually worse than the consequences of the great recession. that kind of puts it in fine focus. >> it does. one of the details of the study they compare less educated black young adults with white young adults and finds that 10% increase in the minimum wage reduces 6.5%, while it is only 2.5% for young white ad adults. this is at a time in cities like washington, d.c. we have 34, 35% unemployment rate among teens. even higher among african-american teens. i think data points like this are incredibly important to take into account especially when you talk about a jobs agenda. these policies lop off the bottom rung of the jobs ladder. david: we should mention by the way, most people who are making minimum wage live in households that are about middle class wage, about 45,000 a year because
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they're sons and daughters who stayed on there but we already, you point out in a "wall street journal" piece because we already have a $9 minimum wage because you have to add onto that the earned income tax credit. explain that. >> about one in six of families earning the minimum wage right now sort of fit the bill of let's say a single parent supporting children. if you take the family, like a single parent with two children the earned income tax credit adds $5200 to the income. we've done that because we want to find effective ways to boost wages of low income families. the earned income tax credit does it through the tax code instead of mandate employers. you get the boost in income without the consequence of higher minimum wage. david: michael salesman, we have to leave it at that research director for the policies institute. >> thanks, david. david: liz, over to you. liz: a new report from a company called mandiant claims that china's military has been stealing data from companies and organizations
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here in the u.s., more than 140 of them. joining us up the chairman joins us live and more on this report and how to protect against cyber attacks. he is ceo of fireeye, the company that helps close up the holes that lets the hackers worm in. we'll talk to him to find out what's going on. . . ...
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>> i'm ashley webster with your fox business brief. it has been a bullish day on wall street with the s&p 500 hitting a five-year high. at the closing bell the dow also finishing 53 points higher to 14,035. hackers taking aim at more twitter accounts just a day after burger king's account was hacked. chrysler says hackers gained access to the its jeep brands twitter can account
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making false tweets until the company that handled its social media regained control. cable networks bet and mtv appear to have been hacked. twitter telling fox business they have nothing to announce at the moment and they do not comment on individual accounts. 2012 appears to be a good year for bank of america's chief executive brian moynihan. the banking giant gave its ceo more than $11 million in bonus pay. that is the latest from the fox business network, giving you the power to prosper. you are gonna need a wingman. and with my cash back, you are money. forget him. my airline miles will take your game worldwide. what i'm really looking for is -- i got two words for you -- re-wards. ♪ there's got to be better cards than this. [ male announcer ] there's a better way with creditcards.com. compare hundreds of cards from all the major banks to find the one that's right for you. it's simple. search, compare, and apply at creditcards.com.
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first round's on me. all stations come over toly mithis is for real this time. step seven point two one two. rify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers. liz: hey, they're in good company. "the new york times", "the wall street journal", now apple, is the latest big company to fall victim to a cyberattack. the news comes just hours after cybersecurity firm mandiant released its report linking china's military to cyber attacks on 141 companies over seven years. in the wake of all of that now members of congress are pressing the caps lock
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button and demanding an international cyber agreement to stop the hacking. dianne feinstein is a senator already pushing for this. joining us live from palo alto, california, mandiant chairman and fireeye ceo dave dewalt. we just spoke after the "new york times" a while ago was hacked and "the wall street journal" as well. you guys were brought in to figure out and connect the dots. after seven years you guys really have. i'm sure you really ramped up since then but how did you make the connection between the chinese military and all of these hacking cases? >> well, liz, thanks for having me but we've been tracking, you know, a series of what we call apts or advanced persistent threats for quite a number of years now as you mentioned, six, seven years, all the way back to 2006 and we've been tracing it back consistently to a certain district in shanghai, in the pudong district of shanghai. we've been tracking ip addresses. type of malware is similar,
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families each time over the years. after 140 companies, over 1900 incidents, the amount of forensic evidence is so compelling and overwhelming it is so obvious what's happening and who's behind it. liz: oh, so on just -- on just, they death protest too much, me thinks. chinese say cyber attacks are anonymous and transnational. i don't know what you guys mean. you guys pinpointed it. we shown the map and zoomed in on the satellite picture and the building is owned by the chinese military where this is all happening. who are they kidding? >> there is no doubt about it. this is an embarassment to china my opinion. it is amazing and shocking and just overwhelming evidence what has been going on. i've been involved in the security industry a lot of years having been ceo of mcafee and fireeye and mandiant. mandiant has some of the best forensic investigators in the world, best products in the world, they have studied this problem for years and it is so blatantly
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obvious what is happening. it needs to stop. you hear from the house intelligence committee, mike rogers, we need to stop this, the executive order from the president. we need a resolution to this and soon. liz: as i said senator dianne feinstein out of california issued a response today in fact saying we need some type of an agreement to stand down because it really does look like a cyber war at this point. they accuse us, saying hey, americans are trying to hack into our companies as well. look, it can be he said/she said, all they want but the fact you talk to any ceo, particularly of a electronics companies and they tell me, liz, we can hear them knocking on our i-t door. we can see where there have been attempts to get in what is it you guys can do at fireeye to make sure the plugs are in, the holes are sealed and these guys can't get in and steal our secrets? >> liz, first of all this is across industry problem not just high-tech or clean tech. liz: coca-cola, i
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understand. >> yeah. coca-cola. obviously industries from energy, oil and gas, up types of sectors and all over the world for that matter. the offense and defense are completely dislocated. it is very easy to attack a network at this point. you can hide behind anonymity. we need to come together as public and private sector. liz: do we need our government in here, dave as we finish up? do we need the power of the u.s. military to start helping us protect our companies? >> we need some help and the executive order was a good start. there is great technology. mandiant, fireeye, two good examples as you mentioned. we need government to come together with commercial operations. we need education happening just like we're seeing in the last few weeks but we need to come together to solve this problem and it is going global. it is not just china. we see over 100 countries around the world involved with cyber espionage right now. it is too easy to steal information and money and the cyber domains around the world are an easy victim to
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prey and to the hackers out there. so we need to work on this and we need to work on it fast and technology and government need to come together to fix it. liz: well, you're bridging it. thank you very much. dave dewalt is the chairman of mandiant and ceo of fireeye and companies go to him, not the fbi, because they want to keep it quiet but also want help with this thank you so much. we appreciate it. >> thank you. liz: david? david: we have many so breaking news. you heard it here first. last week the news about the sec investigation into trading for heinz. heinz stock of course right before, the day before the announcement was made by berkshire hathaway that they were going to try to acquire heinz, some very mysterious trading leading to 1.7 million dollars in profits, leading to the sec investigation. now, the fbi is involved. they have launched a criminal inquiry into these, this options trading business. they are consulting now with the sec to determine if a crime was committed, perhaps a postal crime, seeing how
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some of those postal agencies may have been used in transferring of the money. we'll give you all the updated information. the fbi has launched an investigation into the heinz trading situation. meanwhile health care providers are taking a big hit today after a proposal to change medicare rates turned out to be a lot lower than anybody expected. will the proposed rates stick and will health care stocks continue to go into the dumps as a result? we'll head to the sec with the latest. to grow, we have to boost our social media visibility.
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more "likes." more tweets. so, beginning today, my son brock and his whole team will be our w senior social media strategists. any questions? since we make raator valves wouldn't it be better if we just let fedex help us to expand to new markets? hmm gotta admit that's better than a few "likes." i don't have the door code. who's that? he won a contest onlin to be ceo for the day. how am i supposed to run a business here without an office?! [ le announcer ] fast reliable deliveries worldwide. fedex. [ le announcer ] fast reliable deliveries worldwide. we asked total strangers to watch it for us. thank you so much. i appreciate it. i'll be right back. they didn't take a dime. how much in fees does your bank take to watch your money? if your bank takes more money than a stranger, you need an ally.
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liz: the reimbursement rates our government sets for medicare advantage directly affect what the big health care providers receive. david: the government wants to cut rates a lot more than expected. look what happened to the stocks. these health care stocks took a fall, humana the biggest, cigna, united health care all down. peter barnes from washington, d.c. with the latest. this is just a suggestion. the industry will have a chance to make their case, right? >> that's right. the industry plans to fight back on the proposed medicare reimbursement cuts with the medicare advantage, the popular hmo for medicare. they proposed a cut of 5% or
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more in its payments to insurance companies that offer medicare advantage. about a quarter of all seniors in medicare, about 15 million, are enrolled in medicare advantage. for some seniors it can abetter deal with added benefits like vision care and dental but patients have to stay in the network which is how the insurance companies can manage the costs. the feds say they can lower reimbursements now because of lower drug costs and program reforms, but the industry says this is just going too far. one analyst says, it hasn't in the past. >> one in four seniors have chosen to enroll in a medicare advantage plan because of the additional benefits, better services, and higher quality care. this program provides to beneficiaris. look back to the 200945-day notice, when the industry was hit, with an very unexpected 4 1/2% rate cut. that really shook the stocks quite a bit in the weeks
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after it came out humana actually grew its ebitda margin in the face of that cut. it was a great endorsement. >> the industry has a 45-day comment period to try to soften these proposals. david and liz. david: thanks, peter. liz: we'll see you tomorrow [ male announcer ] i've seen inedib this. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪
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